Johannesburg - South African bonds were steady in early trade on
Monday ahead of what is an extremely busy economic data week for the local
market, with attention turning to inflation, credit, employment and trade data
releases.
By 08:15
the benchmark R157 bond was bid at 7.745% after closing at 7.750% on Friday and the
10-year R207 was bid at 8.575% from 8.580% previously. The long-term R186
was bid at 8.835% from 8.830% at its previous close.
The rand
was bid at R7.4132 to the dollar from R7.4111 at its previous close.
Monday's
data includes June liquidations and insolvencies and April tourism and
migration stats.
Focus
shifts to the Q2 Quarterly Labour Force Survey (LFS) on Tuesday, which will be
watched closely after the previous survey showed a further 171 000 jobs were
lost in Q1.
"As
perhaps a precursor to this week's employment numbers, the Q2 Manpower
Employment Survey for South Africa showed that the net hiring intentions of
employers deteriorated to 8% from 13% the prior quarter," AbsaCapital
analysts pointed out.
"Although this is above the lows of 1% reached in Q4 09, hiring intentions
are well off their peak of 27% recorded in Q1 08. We remain of the view that
SA's labour market is likely to have struggled further in Q2, given the
still-challenging and uncertain economic environment for many companies. World
Cup-related employment may have provided a buffer to the Q2 employment
figures," they said.
The data
is followed on Wednesday by the June consumer price index and the June producer
price index on Thursday. Also on Thursday, the SARB releases June M3 and PSCE
data and the Treasury releases the June statement of revenue, expenditure and
borrowing. Finally on Friday, Customs and Excise releases June trade data.
Moderating
goods price inflation is likely to remain the main driver behind the slowdown
in consumer prices, while administered prices are likely to continue to grow at
well above the Sarb's upper 6% target band, AbsaCapital analysts noted.
Private sector credit extension figures released on Thursday are likely to
continue to show evidence of mild improvement after PSCE growth jumped into
positive territory in May for the first time in eight months, they added.
"We
expect much of this growth to be driven by an uptick in household credit
extension, while base effects should help steer headline corporate credit
growth modestly higher. We look for the data to indicate that overall growth in
PSCE continues to be held back by corporates, which in our view, remain
hesitant to engage in significant capital expansion and/or take on new
debt."
Foreigners were net buyers of R4.333bn of South African bonds
including repo transactions on Friday, after net purchases of R51.918m of local bonds on Thursday, Bond Exchange of South Africa statistics show.
Nominal
cumulative volume was R65.280bn on Friday from R71.294bn on
Thursday.
Foreigners
were net buyers of R4.327bn of South African bonds excluding repo
transactions on Friday, after net sales of R57.093m of local bonds
on Thursday.
In the year to date foreigners have
been net buyers of R55.334bn worth of local
bonds, excluding repo transactions.
So
far for total transactions, including repo transactions, foreigners have been net buyers
of R54.878bn worth of bonds.
In
2009 foreigners were net buyers of R27.755bn worth of local bonds, excluding repo
transactions, while for total transactions, including repo transactions,
foreigners were net sellers of R2.424bn worth of bonds.
- I-Net Bridge